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The Nordic countries may be seen as extreme cases of what has been termed coordinated economies (Farndale, Brewster, & Poutsma, 2014; Goergen, Brewster, Wood, & Wilkinson, 2012; Hall & Soskice, 2001; and see Chapter 2). A coordinated economy is a market economy in which there are comprehensive regulatory limits to the market, as opposed to a liberal economy, where only basic institutions rein in or direct the functioning of a free market. Hence, in practice, the Nordic countries, that is, Denmark, Finland, Iceland, Norway, and Sweden, all show some of the highest levels of taxation, income redistribution, public spending (averaging approximately 50 percent of the gross domestic product [GDP]: Finland, 54 percent, to Iceland, 42 percent, Organisation for Economic Co-operation and Development, 2019a), publicly operated free healthcare provision, and educational services. Labor markets are characterized by high levels of union membership (Organisation for Economic Co-operation and Development, 2019b), even higher coverage of collective agreements (Organisation for Economic Co-operation and Development, 2019c), and a high levels of women’s participation (Organisation for Economic Co-operation and Development, 2019d). At the same time, income levels are relatively high (Eurostat, 2019; Organisation for Economic Co-operation and Development, 2016) and the countries are very competitive economies, relying, in particular, on their ability to sell their different types of goods and services in the global market.

Human resource management practices in the Nordic countries have been characterized as “soft” and …